Papa John’s International (PZZA) Q1 2026 earnings summary

Executive summary

• Transformation plan focused on operational excellence, innovation, and franchisee support continues, aiming for long-term profitable growth despite a highly promotional QSR environment and consumer headwinds.

• Revenue declined 7.7% year-over-year to $478.6 million, driven by refranchising and lower North America sales.

• International business delivered strong results, with six consecutive quarters of positive comparable sales and systemwide sales up 6%, while North America faced mid-single digit declines due to lower new customer acquisition and order declines.

• Product innovation, including Pan Pizza, Oven-Toasted Sandwiches, and Toy Story 5 collaboration, is central to driving customer engagement and expanding the addressable market.

• The Enterprise Transformation Plan led to $4.3 million in restructuring costs and closure of 44 North America restaurants.

Financial highlights

• Global system-wide restaurant sales were $1.2 billion, down 3% in constant currency, as international growth was offset by North America declines.

• Total consolidated revenue for Q1 was $478.6 million, down 7.7% year-over-year, mainly due to refranchising and lower North America sales.

• Consolidated adjusted EBITDA decreased to $47.8 million, impacted by lower North America sales and increased food costs, partially offset by international performance and cost savings.

• Domestic company-owned restaurants delivered four-wall EBITDA of $16.6 million and a margin of 11.9%, up 140 basis points year-over-year.

• Free cash flow was an outflow of $6.2 million, compared to an inflow of $19.1 million last year, reflecting lower net income and normalized incentive payments.

Outlook and guidance

• 2026 global system-wide sales expected to be flat to low single-digit declines; North America comparable sales expected down 2%-4%, International comparable sales expected to increase 2%-4%.

• Consolidated adjusted EBITDA guidance for 2026 is $200-$210 million.

• Capital expenditures expected between $70-$80 million; effective tax rate 30%-34%; diluted shares outstanding ~33 million.

• At least $30 million in G&A savings and $60 million in supply chain savings targeted over 2026–2027.

• On track to open 40-50 new North America restaurants and 180-220 internationally in 2026, with 200 North America closures and 5%-6% international closures.